shl Doc 742 Filed 02/03/14 Entered 02/03/14 12:26:41 Main Document Pg 1 of 24

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1 Pg 1 of 24 Hearing Date: February 5, 2014 at 11:00 a.m. (ET) Objection Deadline: February 3, 2014 at 4:00 p.m. (ET) AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York Tel: (212) Fax: (212) Lisa G. Beckerman Rachel Ehrlich Albanese Lindsay K. Zahradka AKIN GUMP STRAUSS HAUER & FELD LLP 1333 New Hampshire Avenue, N.W. Washington, DC Tel: (202) Fax: (202) Scott L. Alberino (Admitted Pro Hac Vice) Counsel to the Debtors and Debtors in Possession UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK Chapter 11 In re: METRO AFFILIATES, INC., et al., 1 Case No (SHL) Jointly Administered Debtors. DEBTORS OBJECTION TO MOTION FOR RELIEF FROM STAY FILED ON BEHALF OF JOSEPHINE MARKOVSKI The above-captioned debtors and debtors-in-possession (collectively, the Debtors ) respectfully submit this objection (the Objection ) 1 to the Motion for Relief from Stay [ECF No. 1 The Debtors in these chapter 11 cases, along with the last four digits of each Debtor s federal taxpayer identification number, are: 180 Jamaica Corp. (7630); Amboy Bus Co., Inc. (2369); Atlantic Escorts, Inc. (8870); Atlantic Express Coachways, Inc. (2867); Atlantic Express New England, Inc. (4060); Atlantic Express of California, Inc. (5595); Atlantic Express of Illinois, Inc. (5759); Atlantic Express of LA, Inc. (1639); Atlantic Express of Missouri, Inc. (3116); Atlantic Express of New Jersey, Inc. (8504); Atlantic Express of Pennsylvania, Inc. (0330); Atlantic Express Transportation Corp. (4567); Atlantic Queens Bus Corp. (0276); Atlantic Paratrans of NYC, Inc. (1114); Atlantic Paratrans, Inc. (3789); Atlantic Transit, Corp. (7142); Atlantic-Hudson, Inc. (5121); Block 7932, Inc. (3439); Brookfield Transit, Inc. (8247); Courtesy Bus Co., Inc. (5239); Fiore Bus Service, Inc.

2 Pg 2 of ] (the Lift Stay Motion ), filed on behalf of Josephine Markovski (the Movant ). In support of this Objection, the Debtors respectfully state as follows: PRELIMINARY STATEMENT 2 1. By the Lift Stay Motion, the Movant seeks to obtain an advantage over other similarly situated creditors, to the detriment of all unsecured creditors. As set forth in further detail below, lifting the stay to permit the Movant to prosecute the Lawsuit will result in increased claims under the DIP Credit Facility, which in turn will result in decreased recoveries for unsecured creditors. Rather than permit the Movant this windfall recovery, the Court should deny the Motion as premature and preserve the breathing space the automatic stay was intended to provide so that the Debtors may determine an orderly procedure for fairly resolving pending personal injury lawsuits. BACKGROUND 2. On March 16, 2012, the Movant was allegedly involved in an accident (the Accident ) involving certain of the debtors, on account of which the Movant commenced a lawsuit in the Superior Court of New Jersey, Passaic County entitled Markovski vs. Robinson, Index No /13 (the Lawsuit ). 3. At the time of the Accident, the Debtors were insured by Liberty Mutual Fire Insurance Co. (the Insurer ) under policy number AS (the Policy ). The Policy provides coverage of $1,000,000 and has a per-claim deductible of $500,000 (the (1233); Groom Transportation, Inc. (7208); G.V.D. Leasing, Inc. (0595); James McCarty Limo Services, Inc. (8592); Jersey Business Land Co. Inc. (3850); K. Corr, Inc. (4233); Merit Transportation Corp. (8248); Metro Affiliates, Inc. (0142); Metropolitan Escort Service, Inc. (9197); Midway Leasing, Inc. (7793); R. Fiore Bus Service, Inc. (3609); Raybern Bus Service, Inc. (9412); Raybern Capital Corp. (6990); Raybern Equity Corp. (3830); Robert L. McCarthy & Son, Inc. (4617); Staten Island Bus, Inc. (6818); Temporary Transit Service, Inc. (0973); Atlantic Express of Upstate New York Inc. (1570); Transcomm, Inc. (4493); and Winsale, Inc. (2710). The Debtors service address at Metro Affiliates, Inc. s corporate headquarters is 7 North Street, Staten Island, NY Capitalized terms used but not defined in the Preliminary Statement shall have the meanings ascribed below. 2

3 Pg 3 of 24 Deductible ). The Deductible is collateralized by, among other things, letters of credit in the amount of $17,864,335 (collectively, the L/Cs ), attached hereto as Exhibit A, currently comprising a portion of the Debtors debtor-in-possession financing facility (the DIP Credit Facility ). In the event that, among other things, the Insurer funds the Deductible, the Insurer is entitled to draw on the L/Cs. See Atlantic Express Transportation Corp. Letter of Credit Security Schedule (the L/C Security Agreement ), attached hereto as Exhibit B. 4. On November 4, 2013 (the Petition Date ), each of the Debtors filed a voluntary petition under chapter 11 of the Bankruptcy Code with this Court. 5. On November 13, 2013, the Office of the United States Trustee for Region 2 appointed the official committee of unsecured creditors in these chapter 11 cases (the Committee ). No trustee or examiner has been appointed in these chapter 11 cases. ARGUMENT The Movant Has Not Met Her Burden of Demonstrating Cause for Lifting the Automatic Stay Pursuant to Section 362(d)(1) of the Bankruptcy Code 6. The Movant requests relief from the automatic stay pursuant to Bankruptcy Code section 362(d)(1) in order to proceed with the Lawsuit. Section 362(d)(1) of the Bankruptcy Code provides, in relevant part, that relief from the stay may be granted for cause. 11 U.S.C. 362(d)(1); see also Sonnax Indus., Inc. v. Tri Component Prods. (In re Sonnax Indus., Inc.), 907 F.2d 1280, 1285 (2d Cir. 1990) ( The burden of proof on a motion to lift or modify the automatic stay is a shifting one. Section 362(d)(1) requires an initial showing of cause by the movant ). Section 362(d)(1) does not define cause. U.S. Bank Trust Nat l Ass n v. Am. Airlines, Inc. (In re AMR Corp.), 485 B.R. 279, 295 (Bankr. S.D.N.Y. 2013), aff d, 730 F.3d 88 (2d Cir. 2013). However, in Sonnax, the Second Circuit outlined twelve factors to be considered when deciding whether to lift the automatic stay. The twelve Sonnax factors are: 3

4 Pg 4 of 24 (1) whether relief would result in a partial or complete resolution of the issues; (2) lack of any connection with or interference with the bankruptcy case; (3) whether the other proceeding involves the debtor as a fiduciary; (4) whether a specialized tribunal with the necessary expertise has been established to hear the cause of action; (5) whether the debtor s insurer has assumed full responsibility for defending it; (6) whether the action primarily involves third parties; (7) whether litigation in another forum would prejudice the interests of other creditors; (8) whether the judgment claim arising from the other action is subject to equitable subordination; (9) whether movant s success in the other proceeding would result in a judicial lien avoidable by the debtor; (10) the interests of judicial economy and the expeditious and economical resolution of litigation; (11) whether the parties are ready for trial in the other proceeding; and (12) impact of the stay on the parties and the balance of harms. 907 F.2d at 1286 (citing In re Curtis, 40 B.R. 795, (Bankr. D. Utah 1984)). Only those factors relevant to a particular case need be considered, and factors need not be assigned equal weight. See In re Touloumis, 170 B.R. 825, 828 (Bankr. S.D.N.Y. 1994); Schneiderman v. Bogdanovich (In re Bogdanovich), 292 F.3d 104, 110 (2d Cir. 2002) ( Not every one of these factors will be relevant in every case. ). 7. The moving party bears the initial burden to demonstrate, using the relevant Sonnax factors, that cause exists to lift the stay. See, e.g., In re Sonnax Indus., 907 F.2d at 1285; Mazzeo v. Lenhart (In re Mazzeo), 167 F.3d 139, 142 (2d Cir. 1999). Those who seek to avoid the proscription of 362 must apply to the court for an order to lift, vacate or modify the automatic stay for good cause shown. Morgan Guar. Trust Co. of N.Y. v. Hellenic Lines, Ltd., 38 B.R. 987, 998 (S.D.N.Y. 1984). 8. If an initial showing of good cause is not made, the court should deny relief without requiring any showing from the debtor that it is entitled to continued protection. In re Sonnax Indus., 907 F.2d at 1285; In re Bogdanovich, 292 F.3d at 110 ( The burden is on the moving party... to make an initial showing of cause. Absent such showing, relief from the effect of a stay will be denied. ) (citation omitted); Mazzeo, 167 F.3d at 142 ( Only if the movant makes such a showing does any burden shift to the debtor; absent a showing of cause, the court 4

5 Pg 5 of 24 should simply deny relief from the stay. ); Capital Commc ns Fed. Credit Union v. Boodrow (In re Boodrow), 126 F.3d 43, 48 (2d Cir. 1997) ( We have emphasized that a bankruptcy court should deny relief from the stay if the movant fails to make an initial showing of cause. ) (internal quotation omitted). 9. In order to make the requisite initial showing of cause, the movant must demonstrate the existence of a particularized injury that will result from the continued application of the stay. Global Cable, Inc. v. Adelphia Commc ns Corp. (In re Adelphia Commc ns Corp.), No. 02 CIV 9770 (RCC), 2006 WL , at *3 (S.D.N.Y. June 6, 2006) (affirming bankruptcy court s denial of motion to lift stay). Further, the movant may not rely on conclusory statements of harm but must present evidence to support its initial showing of cause. Lazard v. Texaco, Inc. (In re Texaco, Inc.), 81 B.R. 820, 829 (Bankr. S.D.N.Y. 1988) ( Conclusory statements that a continuance of the stay will cause irreparable harm or that injury will occur if relief is denied are insufficient to establish cause. ). A. The Movant Has Failed to Meet Her Initial Burden of Establishing Good Cause 10. The Movant s request for modification of the stay should be denied because she has failed to meet her initial burden of establishing good cause under Sonnax. While the Debtors sympathize with the physical injuries the Movant asserts she has suffered in connection with the Accident, the Movant fails to provide any particularized injury that she would suffer from the continued application of the stay. See Mot. 4 (alleging Movant has suffered severe and permanent injuries, which have caused her pain and suffering and have caused her to incur medical bills, attorneys [sic] fees and costs ); see also Adelphia, 2006 WL , at *3. Indeed, the Movant has submitted no evidence of what specific hardship she stands to face on account of the continued application of the automatic stay. Thus, the Movant has failed to make an initial showing of good cause under the Sonnax factors. The burden therefore does not shift to 5

6 Pg 6 of 24 Debtors, and the Lift Stay Motion should be denied. In re Sonnax Indus., 907 F.2d at 1285; In re Bogdanovich, 292 F.3d at 110; Mazzeo, 167 F.3d at 142. B. Application of the Relevant Sonnax Factors Weighs in Favor of Denying the Lift Stay Motion 11. Even if the Movant had made an initial showing of cause sufficient to warrant consideration of the requested relief under the twelve Sonnax factors, the Movant has not demonstrated that the relevant factors weigh in favor of lifting the stay. In re Sonnax Indus., 907 F.2d at 1288 ( [T]he inquiry called for by motions to lift the automatic stay [is] very fact-specific and involve[s] the weighing of numerous factors peculiar to the particular case. ) (citation omitted). In this case, five of the twelve Sonnax factors (factors 2, 5, 7, 10 and 12) weigh heavily against lifting the stay. i. Relief from the Stay Would Likely Cause a Deluge of Similar Motions, Draining Estate Resources and Taxing the Court s Resources 12. The second Sonnax factor provides that cause for lifting the stay may be shown when such relief would have little impact upon the bankruptcy case. The opposite is true here. Lifting the stay to permit the Movant to pursue the Lawsuit, which implicates a sizeable Deductible, would likely lead to a flood of similar motions from other personal injury claimants, which is exactly the type of harm that the automatic stay is intended to prevent. See In re Bally Total Fitness of Greater N.Y., Inc., 402 B.R. 616, 623 (Bankr. S.D.N.Y. 2009) (denying a motion for relief from the automatic stay where granting relief could open the floodgates to a multitude of similar motions causing further interference with the bankruptcy case ); In re Northwest Airlines Corp., No (ALE), 2006 WL , at *2 (Bankr. S.D.N.Y. Mar. 10, 2006) (denying a motion for relief from stay under the Sonnax factors where lifting the automatic stay... would open the floodgates for similar motions and cause the Debtors to refocus their energies on litigation before other courts rather than emergence from Chapter 11. ). The cost of 6

7 Pg 7 of 24 defending against the Lawsuit and any similar lawsuits that followed would be born entirely by the Debtors estates, increasing the administrative costs of these cases and distracting the Debtors already over-taxed management from the consummation of these cases, which should be the Debtors primary focus. This potential deluge of similar lift stay requests would additionally be an enormous drain on judicial resources, which is the tenth Sonnax factor. Thus, the second and tenth Sonnax factors weigh against lifting the automatic stay. ii. As the Insurer Will Draw on the Debtors Letter of Credit, the Balance of Harms Favors the Debtors Estates and Continuation of the Automatic Stay as to the Lawsuit 13. Despite the Movant s assertion that [she] agrees not to enter judgment against the [D]ebtors, the Movant fails to address the $500,000 per-claim Deductible. See Mot. 6. As set forth above, to the extent the Insurer funds the Deductible, the Insurer is entitled to simultaneously draw on the L/Cs to reimburse itself for such funding, which would severely harm recoveries in these chapter 11 cases for the Debtors unsecured creditors. 14. The Debtors appreciate that the Movant would prefer to proceed with the Lawsuit and receive any recovery flowing therefrom as soon as possible, rather than waiting in line with all other creditors and permitting the Debtors the breathing room that the automatic stay affords. But if the Movant were granted relief from the automatic stay and obtained a judgment in the Lawsuit and the Debtors did not themselves fund the Deductible (which would require borrowing under the DIP Credit Facility in any case), the Insurer would be entitled under the Policy to draw on the L/Cs to reimburse itself for satisfaction of the Deductible (the L/C Draw ). See L/C Security Agreement. As the L/Cs are a component of the DIP Credit Facility, the L/C Draw would increase the amount of the secured superpriority claim owed to the lender under the DIP Facility in like amount, which in turn would decrease the Debtors assets available for distribution to creditors. Especially in these chapter 11 cases, where recoveries for unsecured 7

8 Pg 8 of 24 creditors are expected to be modest at best, a $500,000 increase in secured claims is meaningful. Thus, the fifth and twelfth Sonnax factors weigh heavily against lifting the automatic stay. iii. Litigation of the Lawsuit Will Advantage the Movant over Other Similarly Situated Unsecured Creditors, Prejudicing the Interests of the Debtors Estates 15. The Debtors are working as expeditiously as possible to resolve the myriad issues that have presented themselves in the Debtors chapter 11 cases, but at this point less than three months after the Petition Date the Debtors have not yet determined an orderly process for resolution of their pending personal injury lawsuits. And as set forth above, the L/C Draw that would result from litigation of the Lawsuit will increase the Debtors secured superpriotiy debt. Rather than affording the Movant an unfair advantage over other similarly situated unsecured creditors, it is the Debtors business judgment to discuss the possibilities for resolving the pending personal injury lawsuits with their constituents, including the Committee, and develop a procedure for treating similarly situated creditors fairly. Thus, the seventh Sonnax factor also weighs against lifting the automatic stay. 8

9 Pg 9 of 24 CONCLUSION WHEREFORE, the Debtors respectfully request that the Court (a) deny the Lift Stay Motion and (b) grant such other and further relief as the Court may deem just and appropriate. New York, NY Dated: February 3, 2014 /s/ Lisa G. Beckerman Lisa G. Beckerman Rachel Ehrlich Albanese Lindsay K. Zahradka AKIN GUMP STRAUSS HAUER & FELD LLP One Bryant Park New York, New York Tel: (212) Fax: (212) AKIN GUMP STRAUSS HAUER & FELD LLP 1333 New Hampshire Avenue, N.W. Washington, DC Tel: (202) Fax: (202) Scott L. Alberino Counsel to the Debtors and Debtors in Possession 9

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16 Pg 16 of 24 Irrevocable Standby Letter Of Credit Number : IS Issue Date : April 2, 2012 BENEFICIARY LIBERTY MUTUAL INSURANCE COMPANY H.O. FINANCIAL - CREDIT 175 BERKELEY STREET ATTN: S.J. WHALEN, SECURITIES ANALYST BOSTON, MASSACHUSETTS APPLICANT ATLANTIC EXPRESS TRANSPORTATION CORP. 7 NORTH STREET STATEN ISLAND, NEW YORK LETTER OF CREDIT ISSUE AMOUNT USD 5,563, EXPIRY DATE APRIL 2, 2013 LADIES AND GENTLEMEN: Copy WE HEREBY ESTABLISH THIS CLEAN, IRREVOCABLE AND UNCONDITIONAL LETTER OF CREDIT IN YOUR FAVOR FOR THE ACCOUNT OF THE ABOVE REFERENCED APPLICANT FOR DRAWINGS UP TO FIVE MILLION FIVE HUNDRED SIXTY THREE THOUSAND TWO HUNDRED EIGHTY AND 00/100 U.S. DOLLARS (U.S. $5,563,280.00) EFFECTIVE IMMEDIATELY AND EXPIRING AT OUR OFFICE, AT 401 LINDEN STREET, WINSTON- SALEM, NC 27101, ATTN: STANDBY LC UNIT, WITH OUR CLOSE OF BUSINESS ON APRIL 02, WE HEREBY UNDERTAKE TO PROMPTLY HONOR YOUR SIGHT DRAFT(S) DRAWN ON US, INDICATING OUR CREDIT NO. IS FOR ALL OR ANY PART OF THIS CREDIT IF PRESENTED AT OUR OFFICE AS INDICATED ABOVE ON OR BEFORE THE EXPIRATION DATE OR ANY AUTOMATICALLY EXTENDED EXPIRY DATE. DRAFTS HEREUNDER MUST BE MARKED "DRAWN UNDER WELLS FARGO BANK, N.A. LETTER OF CREDIT NO. IS DATED APRIL 02, 2012". EXCEPT AS EXPRESSLY STATED HEREIN, THIS UNDERTAKING IS NOT SUBJECT TO ANY AGREEMENT, CONDITION OR QUALIFICATION. OUR OBLIGATION UNDER THIS LETTER OF CREDIT SHALL BE OUR INDIVIDUAL OBLIGATION AND IS IN NO WAY CONTINGENT UPON THE REIMBURSEMENT WITH RESPECT THERETO, OR UPON OUR ABILITY TO PERFECT ANY LIEN, SECURITY INTEREST OR ANY OTHER REIMBURSEMENT. IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE (1) YEAR FROM THE EXPIRATION DATE HEREOF, OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST THIRTY (30) DAYS BEFORE ANY SUCH EXPIRATION DATE WE SEND YOU WRITTEN NOTICE BY REGISTERED MAIL OR EXPRESS COURIER ADDRESSED TO LIBERTY MUTUAL INSURANCE COMPANY, H.O. FINANCIAL - CREDIT, ATTN: S.J. WHALEN, SECURITIES ANALYST, 175 BERKELEY STREET, BOSTON, MA 02117, THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT FOR SUCH ADDITIONAL PERIOD. Each page of this document is an integral part of this Irrevocable Standby Letter of Credit Number IS Page 1 of 2

17 Pg 17 of 24 THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 600 (THE UCP). HOWEVER, IF THIS CREDIT CONTAINS A DRAWING SCHEDULE OR A SCHEDULE OF AVAILABILITY, THEN ARTICLE 32 OF THE UCP IS HEREBY EXPRESSLY DELETED. IN ADDITION, IF THIS LETTER OF CREDIT EXPIRES DURING AN INTERRUPTION OF BUSINESS AS DESCRIBED IN ARTICLE 36 OF SAID PUBLICATION 600, WE HEREBY SPECIFICALLY AGREE TO EFFECT PAYMENT IF THE LETTER OF CREDIT IS DRAWN AGAINST WITHIN THIRTY (30) DAYS AFTER THE RESUMPTION OF OUR BUSINESS. Very Truly Yours, WELLS FARGO BANK, N.A. By: Authorized Signature The original of the Letter of Credit contains an embossed seal over the Authorized Signature. Copy Please direct any written correspondence or inquiries regarding this Letter of Credit, always quoting our reference number, to Wells Fargo Bank, National Association, Attn: U.S. Standby Trade Services at either One Front Street MAC A , San Francisco, CA or 401 Linden Street MAC D , Winston-Salem, NC Phone inquiries regarding this credit should be directed to our Standby Customer Connection Professionals Option 1 (Hours of Operation: 8:00 a.m. PT to 5:00 p.m. PT) Option 2 (Hours of Operation: 8:00 a.m. EST to 5:30 p.m. EST) Each page of this multipage document is an integral part of this Irrevocable Standby Letter of Credit Number IS Page 2 of 2

18 Pg 18 of 24 Irrevocable Standby Letter Of Credit Number : IS Issue Date : April 11, 2012 BENEFICIARY LIBERTY MUTUAL INSURANCE COMPANY H.O. FINANCIAL CREDIT 175 BERKELEY STREET ATTN: S.J. WHALEN, SECURITIES ANALYST BOSTON, MASSACHUSETTS APPLICANT ATLANTIC EXPRESS TRANSPORTATION CORP. 7 NORTH STREET STATEN ISLAND, NEW YORK LETTER OF CREDIT ISSUE AMOUNT USD 1,500, EXPIRY DATE APRIL 11, 2013 LADIES AND GENTLEMEN: WE HEREBY ESTABLISH THIS CLEAN, IRREVOCABLE AND UNCONDITIONAL LETTER OF CREDIT IN YOUR FAVOR FOR THE ACCOUNT OF THE ABOVE REFERENCED APPLICANT FOR DRAWINGS UP TO ONE MILLION FIVE HUNDRED THOUSAND AND 00/100'S U.S. DOLLARS (USD 1,500,000.00) EFFECTIVE IMMEDIATELY AND EXPIRING AT OUR OFFICE, AT 401 LINDEN STREET, WINSTON-SALEM, NC , ATTN: STANDBY LC UNIT, WITH OUR CLOSE OF BUSINESS ON APRIL 11, WE HEREBY UNDERTAKE TO PROMPTLY HONOR YOUR SIGHT DRAFT(S) DRAWN ON US, INDICATING OUR CREDIT NO. IS FOR ALL OR ANY PART OF THIS CREDIT IF PRESENTED AT OUR OFFICE AS INDICATED ABOVE ON OR BEFORE THE EXPIRATION DATE OR ANY AUTOMATICALLY EXTENDED EXPIRY DATE. DRAFTS HEREUNDER MUST BE MARKED "DRAWN UNDER WELLS FARGO BANK, N.A. LETTER OF CREDIT NO. IS DATED APRIL 11, 2012." EXCEPT AS EXPRESSLY STATED HEREIN, THIS UNDERTAKING IS NOT SUBJECT TO ANY AGREEMENT, CONDITION OR QUALIFICATION. OUR OBLIGATION UNDER THIS LETTER OF CREDIT SHALL BE OUR INDIVIDUAL OBLIGATION AND IS IN NO WAY CONTINGENT UPON THE REIMBURSEMENT WITH RESPECT THERETO, OR UPON OUR ABILITY TO PERFECT ANY LIEN, SECURITY INTEREST OR ANY OTHER REIMBURSEMENT. IT IS A CONDITION OF THIS LETTER OF CREDIT THAT IT SHALL BE DEEMED AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE (1) YEAR FROM THE EXPIRATION DATE HEREOF, OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST THIRTY (30) DAYS BEFORE ANY SUCH EXPIRATION DATE WE SEND YOU WRITTEN NOTICE BY REGISTERED MAIL OR EXPRESS COURIER ADDRESSED TO LIBERTY MUTUAL INSURANCE COMPANY, H.O. FINANCIAL - CREDIT, S.J. WHALEN - SECURITIES ANALYST, 175 BERKELEY STREET, BOSTON, MA 02117, THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT FOR SUCH ADDITIONAL PERIOD. Each page of this document is an integral part of this Irrevocable Standby Letter of Credit Number IS Page 1 of 2

19 Pg 19 of 24 THIS LETTER OF CREDIT IS SUBJECT TO AND GOVERNED BY THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (2007 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 600 (THE UCP). HOWEVER, IF THIS CREDIT CONTAINS A DRAWING SCHEDULE OR A SCHEDULE OF AVAILABILITY, THEN ARTICLE 32 OF THE UCP IS HEREBY EXPRESSLY DELETED. IN ADDITION, IF THIS LETTER OF CREDIT EXPIRES DURING AN INTERRUPTION OF BUSINESS AS DESCRIBED IN ARTICLE 36 OF SAID PUBLICATION 600, WE HEREBY SPECIFICALLY AGREE TO EFFECT PAYMENT IF THE LETTER OF CREDIT IS DRAWN AGAINST WITHIN THIRTY (30) DAYS AFTER THE RESUMPTION OF OUR BUSINESS. Very Truly Yours, WELLS FARGO BANK, N.A. By: Authorized Signature The original of the Letter of Credit contains an embossed seal over the Authorized Signature. Please direct any written correspondence or inquiries regarding this Letter of Credit, always quoting our reference number, to Wells Fargo Bank, National Association, Attn: U.S. Standby Trade Services at either One Front Street MAC A , San Francisco, CA or 401 Linden Street MAC D , Winston-Salem, NC Phone inquiries regarding this credit should be directed to our Standby Customer Connection Professionals Option 1 (Hours of Operation: 8:00 a.m. PT to 5:00 p.m. PT) Option 2 (Hours of Operation: 8:00 a.m. EST to 5:30 p.m. EST) Each page of this multipage document is an integral part of this Irrevocable Standby Letter of Credit Number IS Page 2 of 2

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